US trade team to visit India to discuss domestic sourcing issue

Reacting to India’s warning that it may file a dispute at the World Trade Organisation (WTO) against domestic content requirement in programmes run by several States in the US, a team of American trade officials is visitingNew Delhi this week to dissuade the country from doing so.“It is ironic that while the US did not hesitate in filing a case against domestic content norms in India’s solar programme and getting the WTO to rule against New Delhi, but it wants India to be considerate while evaluating programmes run by US States,” the official added.A team of mid-level officials from the US are scheduled to be in New Delhi on May 12 to hold discussions on the matter with their Indian counterparts.In February, the WTO ruled against New Delhi in a case filed by the US stating that it violated global trade rules by imposing domestic content restrictions on the production of solar cells and modules as part of its National Solar Mission.New Delhi tried to persuade the US to withdraw the case for several months through bilateral discussions, but failed to convince Washington. “Although India has challenged the WTO’s ruling, it is more with an intention to buy more time for continuation of the solar programme without changing sourcing rules, than with the conviction of winning it,” he added.But, now New Delhi wants Washington to sweat it out at the WTO by challenging around 15 programmes run by nine States in the US. The only problem that the country may face here is the fact that Indian manufacturers do not produce many of the items on which US States have domestic procurement rules.For instance South Carolina, Pennsylvania, and West Virginia have made domestic sourcing of a number of inputs compulsory for use in water projects, most of which India does not export.“The US team is likely to point out to us that our industry is hardly affected by the domestic sourcing norms in their States. But, our counter to it is the fact that the norms prevent Indian companies from even considering export of those products,” the official said.US States of Delaware, Minnesota, Massachusetts and Connecticut have incentive programmes for solar projects. New Delhi, too, had held bilateral discussions with the US to make them withdraw the case by citing cases of similar domestic content requirement in programmes run by US States, but it failed.